On 20 March 1895 the reigning prince of Lippe, Prince Woldemar died childless. His heir was his brother Alexander who was incapable of ruling on account of a mental illness so a regency had to be established. A decree had been issued in 1890 by the late Prince Woldemar and though kept secret until his death it resulted in Prince Adolf of Schaumburg-Lippe, the brother in law of the German Emperor William II and not Count Ernst being appointed regent.

This act was disputed by Count Ernst who put forward a claim to the regency. Lippe's diet confirmed Prince Adolf as regent on 24 April pending a settlement over the right to the Lippe regency.[1]

In the first scene (1895–97) of the Lippe succession dispute, it was claimed on part of the Schaumburg-Lippe that count Ernest's paternal grandmother, noblewoman Modeste von Unruh (who belonged to a family of lower nobility) was not noble enough to be legitimately a dynastic wife - that would have made progeny born of her ineligible to succeed.

A settlement was reached in 1897 when a commission under the presidency of King Albert of Saxony ruled in favour of the claims of Count Ernst.[2] Prince Adolf then resigned the regency and was replaced by Count Ernst.

The panel assessed that the Lippe dynasts do not need to marry princely ladies in order to preserve dynasticity; the outcome was a verdict that a lady from an old lower-noble family is sufficient. Modeste von Unruh was adjudicated to have fulfilled this criterion.

While regent Count Ernst was snubbed by the German Emperor after writing to William II complaining that the officers of the local garrison did not salute his children, did not address them by the correct style for a ruling family, and that the commanding general at Detmold had personally ordered this. The Emperor's telegraph in response to Count Ernst's request was:[3]

“

Your letter received. The orders of the commanding General were issued in accordance with my wishes and after inquiry of me. To the regent what is due to the regent, and nothing more. Moreover, I forbid once for all the tone in which you have seen fit to write me.

”

Ernst remained as regent until his death in Schloss Lopshorn at which point his son Leopold succeeded him as head of the Lippe-Biesterfeld line and regent, before becoming the reigning Prince of Lippe four months later on the death of Prince Alexander.

Leopold, Julius and Karola were all guests at their nephew Bernhard's 1937 wedding to Princess Juliana. [5]

In the Lippe succession dispute (1904–05), it was claimed on part of the Schaumburg-Lippe that countess Karoline of Wartensleben (who belonged to a family of counts whose rank of count was from the 18th century, and who were originally of lower nobility) was not noble enough to be legitimately a dynastic wife of count Ernest - that would have made her sons ineligible to succeed. However, it was ruled by the 1905 panel that her birth was high enough and her children with Ernest were dynasts.